SYNOPSIS: Greenspan has squandered his prestige by playing courtier to Bush II, but he has one last chance to save it

It's probably wishful thinking, but some people hope that the old Alan Greenspan — the man we used to respect — will make a return appearance next week.

During the Clinton years Mr. Greenspan became an icon of fiscal probity, constantly lecturing politicians on the importance of eliminating deficits and paying off debt. Then George W. Bush took office, and Mr. Greenspan became — or was revealed as — a different man.

First the Fed chairman lent decisive support to the Bush tax cut, urging Congress to reduce taxes lest the country run too large a budget surplus and pay off its debt too quickly. No, really.

Then when the budget plunged into deficit, Mr. Greenspan not only refused to reconsider, he supported plans to make the tax cut permanent. The stern headmaster had become an indulgent uncle.

But now the fiscal deterioration has reached catastrophic proportions. In its first budget, the Bush administration projected a 2004 surplus of $262 billion. In its second budget, released a year ago, it projected a $14 billion deficit for the same year. Now it projects a deficit of $307 billion. That's a deterioration of $570 billion, just for next year — matched by comparable deterioration in each following year. You know, $570 billion here and $570 billion there, and pretty soon you're talking real money.

Not my fault, says Mr. Bush. "A recession and a war we did not choose have led to a return of deficits," he declared. Really? Will the recession and war cost $570 billion per year, every year? Besides, Mr. Bush knew all about the recession and Osama bin Laden (remember him?) a year ago, when his projections showed a return to surpluses by 2005. Now they show deficits forever — even though they don't include the costs of an Iraq war.

Anyway, isn't a leader supposed to solve problems, not look for excuses? But Mr. Bush proposes to make the problem worse. Contrary to all previous practice, he wants to cut taxes even further in the face of "wartime" deficits.

Although financial reporters have started to realize that Mr. Bush is out of control — he has "lost his marbles," says CBS Market Watch — the sheer banana-republic irresponsibility of his plans hasn't been widely appreciated. That $674 billion tax cut you've heard about literally isn't the half of it. Even according to its own lowball estimates, the administration wants $1.5 trillion in tax cuts over the next decade — more than it pushed through in 2001. Another $575 billion or so will be needed to fix the alternative minimum tax — something officials have said they'll do, but haven't put in the budget.

The administration has used gimmicks to postpone most of the cost of these tax cuts until after 2008 — and whaddya know, the Office of Management and Budget has suddenly stopped talking about 10-year projections and now officially looks only five years ahead. But there are long-term projections tucked away in the back of the budget; they're overoptimistic, but even so they suggest a fiscal disaster once the baby boomers start collecting benefits from Social Security and Medicare. ("We will not pass along our problems to other Congresses, other presidents, other generations," declared Mr. Bush in the State of the Union. And with a straight face, too.)

So where does Mr. Greenspan come in? Next week he will testify before the Senate Banking Committee. Will he, at long last, acknowledge the administration's fecklessness?

Mr. Greenspan must know that many people, whatever they say in public, now regard him as a partisan hack. That very much includes Republicans, who assume that he will support anything Mr. Bush proposes. What he does next week will determine whether that perception sticks.

He has certainly run out of excuses. As a famous fiscal scold, he can't adopt the administration's "deficits, schmeficits" approach. And he can't make the supply-side claim that tax cuts actually increase revenues, when just two years ago he argued for a tax cut to reduce the surplus.

If Mr. Greenspan nonetheless finds ways to rationalize Mr. Bush's irresponsibility, or if he takes refuge in Delphic utterances that could mean anything or nothing, history will remember him as a man who urged hard choices on others, but refused to make hard choices himself.

This may be Alan Greenspan's last chance to save his reputation — and the country's solvency.